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2012: the year of in-flight connectivity

2012 has been a year to remember for in-flight connectivity. Capacity has been expanded, global reach extended, companies have been acquired and, most important for passengers, the number of aircraft offering Wi-Fi and cellular services has increased.


Although some questions still remain over how profitable it will be (particularly in the case of Wi-Fi), Golden Eagle’s recent acquisition of Row 44 and an 86% stake in AIA for the not inconsiderable sum of US$430 million, and Zodiac Aerospace’s acquisition of The IMS Company for an, as yet, undisclosed amount, make a bold statement about each company’s belief that in-flight entertainment and connectivity will be financially rewarding in years to come.


Despite that question hanging over the heads of those in the industry, 2012 has been another busy year, with announcements of new connectivity installations or commitments seemingly every week, if not every day.


From a position just a couple of years ago where connectivity-enabled airlines could be counted on a handful of hands, we’re gradually approaching a point where that method is reserved for counting airlines who don’t offer connectivity or haven’t announced plans to implement it.


Although increasing numbers of airlines have been outfitting their aircraft with in-flight connectivity, service and satellite providers haven’t been resting on their laurels. 2012 has been a year of much progress.


Gogo, mindful of the need to enhance its air-to-ground offering, recently went live with its ATG-4 technology. Offering peak speeds of 9.8Mbps – more than three-times the previous maximum – the upgrade should appease passengers for a little longer. Inmarsat has also announced imminent upgrades to its SwiftBroadband service, with the number of channels available to aircraft doubling from two to four, and the bandwidth capacity per channel also improving from 432kbps to 700kbps-plus early next year.


In the Ku-band space, Panasonic Avionics has signed a flurry of deals with satellite operators, including Intelsat, AsiaSat and RuSat. Not content with moving towards offering a global service, Panasonic Avionics also acquired a majority stake in cellular communications specialist Aeromobile in March, allowing the company to provide an in-flight Wi-Fi and cellular service.


Finally, although the launch of Viasat’s ‘Exede’ Ka-band service, in conjunction with LiveTV, has been delayed until early 2013, additional satellite partners including Eutelsat and Yahsat, will allow the service to be offered beyond North American shores. JetBlue is also promising to offer free ‘basic’ Wi-Fi to customers until at least 30 aircraft have had the service installed – a move which is sure to please passengers.


Other changes have been afoot. Aeromobile announced that Thai Airways International took delivery of the first aircraft, a Boeing 777-300ER, to have its service line-fitted in Boeing’s Seattle plant in November. With Aeromobile becoming a full Boeing catalogue entry in 2013, line-fitments for the service are expected to increase rapidly. In addition, 2012 saw Panasonic Avionics sign deals with Airbus to line-fit its Global Communications Suite on A330 and A380 aircraft.


With other line-fit deals already in place before 2012, there is now a definite acceptance of connectivity from the two major airframe providers, with other aircraft such as Boeing’s 747-8 and 777s expected to offer line-fit options through 2013.


There might still be a long way to go for in-flight connectivity, as attach rates remain low (both in terms of connected aircraft and passengers), there are still questions including how profitable it will be, but I expect that connectivity in the air will follow the barnstorming course of connectivity on the ground.


The business of commercial aviation is changing more rapidly now than at any time during its history, with much of that change driven by modern technology. With the proliferation of smartphones and tablets, it’s not just business passengers who feel the need to be connected. Text messaging, emailing and social networking have become part of the fabric of life, and airlines will have to adapt quickly to passengers’ demands.


I, for one, look forward to a future where I can be filled with child-like enthusiasm by the wonder of being able, on the majority of flights that I take, to instantly share a picture of the view from 36,000ft with the wider world below.


This blog was written by Heath Lockett, aerospace market analyst at IMS Research, a supplier of market research and consultancy to the global electronics industry.

 

31 December 2012

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